date=1/5/95
type=correspondent report
number=2-171800
title=East Euro / Econ (l-only)
byline=Barry Wood
dateline=Prague
content=
voiced at:
Intro: The three Central European countries that are furthest
along in the transformation to market economies continue to
attract most of the direct foreign investment going to
post-communist Europe and the former Soviet Union. V-o-A
economics correspondent Barry Wood reports from Prague.
Text: The Czech Republic, Hungary, and Poland attracted more
than four-billion dollars of new foreign investments in 1994.
For the first time since the collapse of the communism five years
ago, the Czech Republic surpassed its Hungarian and Polish
neighbors, attracting more than two-billion dollars of
investments. Hungary received just over one-billion dollars in
1994, a small decline from the previous year. Poland obtained
about one-billion dollars in investments, a big increase from
previous years.
Altogether, these three fastest reforming Central European
economies have accumulated foreign investments of more than
12-billion dollars. That represents more than two-thirds of the
investments made in all of post-communist Europe and the former
Soviet Union.
The investment figures, however, must be viewed in global
perspective. China, one of the world's fastest growing economies
and a popular destination for investment, obtained more than
20-billion dollars of investment in 1994. The European Bank for
Reconstruction and Development says the foreign investments in
post-communist Europe and the former Soviet Union represent only
12 percent of all investments made in developing countries.
Here in Prague, the Czech National Bank released a statement
calling attention to the little publicized fact that foreign
investment often has a negative implication for monetary policy.
The bank says so much money is coming into the Czech Republic
that the money supply is being increased, adding to inflationary
pressures. Inflation in the Czech Republic is about 10 percent
annually, and there is little prospect for that rate coming down
anytime soon.
German Commercial Banks say investment flows and a growing trade
surplus are putting pressure on the Czech authorities to revalue
the currency. The Czech crown held steady against the German
mark throughout 1994 and gained against the U-S dollar. Czech
policymakers are reluctant to permit the crown to rise further
since that would boost the prices of Czech exports. (Signed)
neb/bdw/skh/jwh
05-Jan-95 1:04 pm est (1804 utc)
nnnn
source: Voice of America
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French, Germans Nudging EU in Different Directions
WILLIAM DROZDIAK (WASHINGTON POST FOREIGN SERVICE)
(C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 219921)
PARIS, Jan. 5 -- At a time when the European Union's expansion to 15 members
poses an unprecedented challenge to achieving common policies, the
organization is facing growing security threats on two flanks -- east and
south -- that threaten its cohesion and, in particular, the crucial
relationship between France and Germany.
While Germany looks at the power vacuum in the east and the unrest
inside Russia with growing alarm, France and other southern states such as
Spain and Italy believe their social stability is being directly affected by
the spillover of Islamic radicalism in North Africa.
France's preoccupation with Algeria's civil war -- which Prime
Minister Edouard Balladur calls his country's number one foreign policy
priority -- and Germany's focus on Eastern Europe have raised fears in both
governments that the EU may become paralyzed just when it requires a clear
sense of direction to press for closer political and economic unity by the
end of the decade.
This strategic dissonance, which has sharpened in recent weeks with
the evolving crises in Algeria and Chechnya, loomed as the most critical
theme in today's private encounter at Balladur's ski chalet in Chamonix
between the prime minister -- who is France's top presidential contender --
and Germany's Chancellor Helmut Kohl, according to French and German
officials.
The EU already is facing a prolonged phase in limbo as France, which
will preside over the Union for the next six months, enters what is likely to
be a highly fractious domestic political campaign that will not be resolved
until a successor to President Francois Mitterrand is chosen in May.
Last week's seizure of an Air France plane by four Algerian
hijackers, who killed three hostages before they were slain in a dramatic
commando raid in Marseille, highlighted the fact that Europe, and especially
rance, can no longer remain immune from a civil war pitting Algeria's army
backed government against Islamic militants. The conflict has killed as many
as 30,000 people in the past three years.
France and other south European states fear that hundreds of
thousands of Algerians would try to flee northward if the Islamic Salvation
ront and its fundamentalist allies succeeded in taking control. Even if the
war drags on and a secular regime manages to cling to power, the EU still
must manage relations with Mediterranean neighbors whose incomes and other
measurable living standards are estimated to be one-tenth that of EU
countries.
French officials acknowledge that even without an Islamic takeover,
the ruined state of Algeria's economy and the demographic explosion that has
created a society in which 70 percent of the country's 26 million citizens
are under 30 will continue to propel emigrants across the Mediterranean.
French Interior Minister Charles Pasqua recently conducted an active
yet discreet campaign against the Islamic militants, including frequent
sweeps of Algerian immigrant quarters and clandestine arms deliveries to the
secular authorities. But the French government seems divided on whether to
follow Pasqua's prescription or a more conciliatory approach favored by
oreign Minister Alain Juppe, who advocates dialogue with Islamic moderates
leading to a revival of democratic elections in Algeria that the Islamic
ront seemed poised to win three years ago.
Pasqua and other French officials have complained that Britain,
Germany and the United States have done a disservice to allied solidarity by
failing to cooperate in a crackdown on the Islamic militants and even
offering asylum to several prominent spokesmen.
Indeed, none of France's allies have any desire to antagonize
Islamic militants because they do not feel their national interests as
involved with Algeria as does France, which maintains deep historical and
cultural ties as the former colonial power and is home to more than 800,000
Algerians. For Germany and other northern EU members, the key strategic
stakes lie in the east: preparing countries including Poland, Hungary and the
Czech Republic for EU membership by the end of the decade and cultivating
greater political and economic stability within Russia.
At last month's EU summit in Essen, Germany, member countries agreed
on a detailed blueprint, largely drawn up by the German government and funded
by a multibillion-dollar trade and aid package, that will upgrade living
standards in the East and ease the transition of the former communist states
to full EU members.
As a passing courtesy to the concerns of France, Spain and Italy,
the EU governments also agreed on the need to open markets and furnish aid --
albeit at much reduced levels -- to foster the development of Europe's
southern neighbors.
"The difference is that with the East, we are talking about future
members of a prosperous and democratic club of European states. With the
south, we are, at best, talking about associate states with open trading
arrangements but who will never be part of the club," said Manuel Marin, the
EU's executive commissioner for relations with Mediterranean countries. "We
need to do something more to rectify this imbalance."
But with Germany unwilling to serve as a perennial sugar daddy for
poor southern states, the future course of the EU is becoming painfully clear
to France and its Mediterranean neighbors. Once the eastern states come into
the Union, they fear that a "Teutonic bloc" will strand them on the periphery
of a grand Europe dominated by Germany's powerful economy and central
geographic position.
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
[*] [*] [*] [*] [*][*] [*][*][*]
[*] [*] [*] [*] [*] [*] [*]
[*][*][*] [*][*][*] [*][*] [*][*]
[*] [*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*] [*]
Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************